Wednesday, September 28

How is the Spanish economy really before investors?

The news about the recovery of the Spanish economy is good. After the “bump” that the pandemic gave us, we have managed to pick up cruising speed and incorporate sectors for growth, above all, taking into account that we are a country with a service economy, mainly. We are not yet as before Covid-19, but we are progressing adequately thanks to European aid, vaccines and the return to normality.

Proof of this is that main Rating agencies, those that rate how the debt of the Spanish economy is, are maintaining their rating. Spain has managed to maintain its long-term sovereign debt rating by the main rating agencies in 2021, despite being one of the countries most affected the previous year by the Covid-19 pandemic and the restrictions implemented to contain its spread, as well as the fact that the rebound in activity throughout the current year has been clouded, in part, by inflation and supply problems, as well as new waves of infections.

In this way, Spanish debt dismisses the second year of the pandemic with the same solvency note, equivalent to a ‘notable’, with which he dismissed 2019, after in 2020 the DBRS and S&P Global agencies worsened the perspective of their respective ratings, from positive to stable in the case of the Canadian and from stable to negative in that of the American.

Spain will start 2022 with a long-term sovereign debt rating of ‘Baa1’, the lowest among the four major agencies, by Moody’s, which will be the first entity to examine the solvency of Spain, to which it assigns a stable perspective, with an initial evaluation on January 14, which will be repeated on July 15, 2022.

In the case of S&P whose score for Spain is ‘A’ with a negative outlook, the results of the solvency tests of the Spanish debt will be announced on March 18 and September 16, 2022.

Also, the Fitch agency, which assigns Spain an ‘A-‘ rating with a stable outlook, will assess, for the first time in 2022, the country’s solvency on June 10 and will carry out a second review on December 2, 2022.

On the other hand, the growth forecast for the Spanish economy it continues to exceed 4% for this year and will exceed 5% next year, despite the fact that many national and international organizations are slowing its growth.

The last to do so was the rating agency Axesor Rating, which announced this Monday that it maintains the growth forecast for Spain’s Gross Domestic Product (GDP) for 2021 at 4.7% and for 2022 at 5.7%, although it has warned of the loss of productivity in all sectors, with the exception of industry.

In short, we come from a bad situation and we are growing at a slower rate than other countries due to our dependence on the service sector, which is the one that is suffering the most in the pandemic. Historically, the Spanish economy has fallen more than its European partners, but when it recovered it did so more strongly than the rest. This time we recover more slowly.

But investors are already taking positions so that opportunities do not escape them. Sectors such as banking have capitalized part of the increases in the stock markets, see here the winners of the Spanish stock market and discover where the investors’ money is coming in.

Leave a Reply

Your email address will not be published.